In 2021, the recovery was driven by the hydrocarbons sector and a stronger recovery in the services sector, despite a decline in agricultural activity. On an annual basis, nonhydrocarbon GDP remained 1.6% lower than its 2019 level, while hydrocarbon GDP approached this level. The recovery in employment opportunities continued but remained incomplete, and inflation continued to rise.
The continued rise in world hydrocarbon prices has led to a marked improvement in macroeconomic balances. Algeria’s trade balance has moved from a deficit of 9.4% of GDP in 2020 to a surplus of 0.7% in 2021, driven by a 70% increase in hydrocarbon export revenues. At the same time, the overall fiscal deficit narrowed from 12% to 7.2% of GDP, supported by the jump in hydrocarbon revenues, a moderate increase in non-hydrocarbon revenues and the lack of a marked recovery in public investment.
In 2022, activity in the hydrocarbon sector should continue to support growth, and activity in the non-hydrocarbon sectors will return to pre-pandemic levels. Hydrocarbon exports are expected to remain at a high level, generating a current account surplus and a marked increase in tax revenues. Macroeconomic balances remain dependent on fluctuations in world oil prices, which are very volatile, in a context of uncertainty surrounding the evolution of the war in Ukraine and the dynamics of the world economy.
Distributed by APO Group on behalf of the World Bank Group.
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